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Business as Unusual

Posted by BoardSource on Nov 1, 2013 11:38:41 AM

The “Complete Capital” Approach to Board Engagement

The “Complete Capital” Approach to Board Engagement

By Angela Francis, manager, Nonprofit Finance Fund

The eleventh in our series of blog posts written by BLF 2013 speakers/presenters/sponsors.

Every year, Nonprofit Finance Fund (NFF) conducts a survey of the nonprofit sector that provides key data on issues like the rising demand for services, shrinking government support, and the precarious financial health of nonprofit organizations. This post explores what these survey results tell us about nonprofit board engagement in tough times.

Since 2009, our survey has asked nonprofit leaders to indicate what management actions they are taking to cope with the recession. In both 2009, 60 percent of nonprofit leaders told us that they were “engaging more closely with the board” by sharing new reports, increasing the number of annual meetings, or stepping up fundraising expectations. But that trend has been steadily declining since then:

Percentage of Respondents Engaging More Closely with the Board, 2009 - 2013

Percentage of Respondents Engaging More Closely with the Board, 2009 - 2013*Note that 2013 represents actions planned, while all other years are reported actions taken.

We were surprised this year when only 41 percent of respondents told us that they planned to work more closely with the board. On the one hand, it is possible that organizations are tapped out. There are certainly very real limits to the time and resources that a volunteer board can give. We’re definitely not encouraging meetings for the sake of meetings, and, at a certain point, it becomes impossible for nonprofits to simply engage “more” with their boards. It’s also possible that nonprofit leaders have become accustomed to operating within the ‘New Normal.’ Perhaps funding uncertainty has just become business as usual, no longer so urgent that it requires additional board meetings. It’s also likely that we’ve all gotten a little better at planning, managing, and expecting the unexpected.

But, unfortunately, the systemic resource challenges facing our sector will not go away just because we’ve gotten better at internally managing them. The big picture takeaway from our 2013 survey results is stark: For a fifth straight year, demand for service continued to rise while funding support is shrinking, or remains unpredictable, at best. It’s beginning to seem like something has to give; business as usual is no longer good enough. At NFF, we’re increasingly witnessing the clear and present need to think differently about the ways that we manage nonprofit organizations.

So what does that mean for an organization’s board? In 2012, we asked survey questions to uncover how nonprofits were working with their boards. The following chart shows the collective response from 3,915 nonprofit managers.

Our board serves as a resource in the following ways:

Our board serves as a resource in the following ways

Most nonprofit managers said that the board was underperforming when it came to fundraising. According to our sampling, 34 percent of nonprofit boards made the “right amount” of donations and a mere 24 percent were willing to leverage their relationships to directly solicit funds for the organization. Only 34 percent of boards were contributing “indirectly” to fundraising efforts through referrals or advice!

The current fundraising environment means that everyone needs to step up their game. But not all board members are recruited for their Rolodex or their wallet, and financial capital is only one type of resource. In order to remain relevant, develop innovative solutions, and meet the increasing demand for their services, nonprofits will also require social, intellectual, and human capital. Solving major societal challenges will only be possible with the right collaborations, partnerships, sector knowledge and new ideas—all things that the board can actively fuel and support. Think beyond the wallet, back to the moment that each member was recruited or voted on to the board: What motivated them to volunteer their time? What made them such a good fit? The answers to these questions can help identify hidden resources that board members can bring to bear on an organization’s most pressing concerns.

To truly go beyond business as usual, the board should think about its fiduciary responsibility as more than fundraising and making budget. The solution is not just “more” board engagement. Rather, the solution lies with board members who can creatively bring a range of available resources to help their organization achieve its mission.

If this topic is of interest to your organization, please join David Greco, vice president at Nonprofit Finance Fund, for his BLF session, Business as Unusual: Adapting the Nonprofit Enterprise.

Editor's Note: A version of this post originally appeared at the ASU Lodestar Center blog as part of its Research Friday series.

Topics: Board Best Practices, New Trends & Resources

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